CA - penny-pinching seller and diva tenant have turned my first real estate buying experience into a nightmare...advice? (agents, contract)
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One bedroom condo in San Diego, currently a rental property for the seller. He paid $205k for it at the peak of the market at the end of 2004, my accepted offer is at $180k. I firmly believe without my involvement it would've sold for $175k.
Tenant had cooperated (and I use that word loosely) throughout the sale process and even though she's under lease until March had told the seller (not in writing of course) she would vacate within 60 days of an accepted offer. The day we opened escrow she "decided" she had to "look out for her family" (she's a single mom with a baby) and therefore would not move until her lease was up unless she received a full buyout of the remainder of the lease, which amounts to $8200.
The seller had offered her $3000 to vacate which she turned down, I offered to match his $3000 and have him come up with the remaining $2200 and threatened with legal action if he did not comply. I felt this was incredibly generous considering the tenant is not my problem and we have a legal contract stating that the property is to be delivered vacant to me at the close of escrow.
The seller is claiming he doesn't have the remaining $2200 and wants to cancel the contract. I don't believe this for a minute. According to the tax records his current residence that he paid $490k for in 2012 is now worth ~$590k. Needless to say, if he wanted to come up with $2200 he could probably do it.
At this point I've upped my share of the tenant buyout to 50% ($4100). I'm quite certain that he's not going to budge past his initial $3000 and will expect me to come up with the remainder of it. Assuming this is how it plays out, what's my best option here? I'm so pissed at how cheap this guy I'm very tempted to go the legal route just to spite him even though it would end up costing more.
tl;dr: Tenant lied about leaving, seller and I fighting it out over paying her off. Advice?
Hate to say this, but in CA if the tenant has a lease the lease survives the sale so it is your problem. You have a "vacant on close" so all you can do is not close. The tenant has every right to decide what they are going to do and change their mind. They do not have to accept anything and can tell you top pound sand and actually ask you to leave them alone. What went wrong is you failed (don't know if your attorney forgot to tell you or you forgot to follow through on their advice) to require a signed lease addendum spelling out the agreement to vacate as you stated. That is just "vacant on close" standard procedure. Without it, your attorney is really the only one to tell you where you stand and what options are available to you.
Walk away and leave the greedy tenant with nothing. The Seller really blew it if he knew he was going to sell and if he signed another 1-year lease. (Of course, it could have been more than one year initially, so you don't know for sure.)
Will she really leave when she gets the money though?
You could explore some verbage about whatever you pay the seller being your downpayment. (Don't pay the renter) You'll be paying above and beyond what you expected so lower the sales price by that amount.
But I'd still be concerned she wouldn't move out and might be covered because the seller didn't address this in his lease. And then you'd be out that money that the renter won't let go of and the seller doesn't have.
Let it go and find another property, make sure you get any inspection money, earnest money or appraisal fees back from the seller. The tenant is greedy and holding you both hostage, I bet she can't even legally get the money because she is probably on assistance. Find another place, pay off this professional moocher and she won't leave at closing and you will have to either forget about the deal or evict her.
Sounds like there aren't any real estate agents involved to have either done this right from the beginning or solve it now. You'll have to ask the attorney who represents you.
From what Ive learned on this forum you are SOL. Tenants lease with the owner supercedes your purchase agreement. The tenant is indeed your problem if you want to buy this condo. If you want to get her out, you will have to pay her off to do so. Otherwise, she's perfectly legal to stay until her lease is up.
Let it go and find another property, make sure you get any inspection money, earnest money or appraisal fees back from the seller. The tenant is greedy and holding you both hostage, I bet she can't even legally get the money because she is probably on assistance. Find another place, pay off this professional moocher and she won't leave at closing and you will have to either forget about the deal or evict her.
Greedy??? The tenant has a lease until next March. There is no reason for her to move unless she gets money to leave. Its not greed. Where do you get that from?? Where does it say shes mooching?
Exactly! If she has a lease that supersedes the sale of the property. Can you live somewhere else until March and then she becomes YOUR tenant until then?
Buy the unit and allow the tenant to live there until March when her lease ends. You find another place to live until then.
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